James Pearson, Head of LCH ForexClear, responds to a few questions about the current state of FX Clearing and how LCH has been broadening its product offering to meet the opportunities that the uncleared market presents.
Buyside and sellside adoption of FX clearing currently differs significantly. Sarah Billingham, Head of FX Specialised Sales at LCH ForexClear, and Kah Yang Chong, Acting Head of State Street TradeNeXus, offer some comments about this divergence and how FX clearing might evolve in the future for both groups.
The growth of the NDF market has seen a steady increase in the volume of trades being novated to clearing, but this is predominantly performed as a post-execution exercise. As a result, the clearing journey can be onerous and ultimately prohibitive for some participants that want to make the most of the benefits that it brings.
As firms pay increasing attention to mitigating client portfolio cost impact, FX clearing and the advances that technology brings to the process are becoming important and generating interest amongst more buyside firms than ever before. But what efficiencies can technology actually deliver?
LCH ForexClear delivers unmatched capital and operational efficiencies, including the flexibility and choice of both US and European clearing models.
Quantile, now part of London Stock Exchange Group, is a market-leading optimisation provider that reduces counterparty risk, notional and capital requirements to increase the efficiency and liquidity of derivatives markets, improve returns for clients, and make the financial system safer. We asked the firm’s CEO, Andrew Williams, to tell more about the products and services this innovative and fast growing company offers, especially for FX.
TradeNeXus is a part of GlobalLink’s suite of market-leading e-trading platforms, technology, data and workflow solutions from State Street.
Conversations around FX clearing have gathered momentum recently, but much remains to be done before it becomes standard practice. A lot of development will naturally come from regulatory forces. James Pearson, Head of ForexClear at LCH lists a few regulatory drivers that might potentially turn FX clearing into an industry norm.
PvP is a settlement mechanism that ensures that the final transfer of a payment in one currency occurs if and only if the final transfer of a payment in another currency takes place. PvP arrangements are primarily designed to reduce settlement risk in foreign exchange transactions.